Search Results
Journal Article
Do Credit Supply Shocks Constrain Employment Growth of Small and Medium-Sized Enterprises?
Small and medium-sized enterprises (SMEs) made outsized contributions to net employment growth during the pandemic recession and recovery. However, credit conditions have tightened significantly during the past year and might hinder growth for small firms going forward. Using data on bank lending to small businesses and employment growth, we estimate that a tightening in bank credit supply of 1 percentage point is associated with an 11 percent decline in SMEs' net job creation rate. This estimate indicates that a bank credit tightening about one-third the size of the tightening observed ...
Journal Article
The Price of Delay: Supply Disruptions, Product Availability, and Strategic Pricing during the Pandemic
During 2020–23, firms did not just face higher costs but faced an unusually tight constraint on product availability. Imports often did not arrive when expected, and port congestion and vessel delays made replenishment unusually uncertain. In Baslandze and Fuchs (2026), we study how these disruptions showed up in consumer prices using newly linked micro data that match shipment-level bills of lading to high-frequency consumer transaction prices. The evidence points to sizable pass-through from delivery shortfalls to prices, above and beyond the standard pass-through of costs. Prices also ...
Journal Article
Tariffs and Consumer Prices: Insights from Newly Matched Consumption-Trade Micro Data
We evaluate the impact of various US tariff scenarios on consumer prices using novel micro-level data linking imports to consumer expenditures. Results indicate that an additional 10 percent tariff on Chinese imports, 25 percent tariffs on Canadian and Mexican imports, and 10 percent tariff on other countries could raise consumer prices on everyday retail purchases, such as food and beverage items and general merchandise, covering about a quarter of the total consumption basket, by 0.81 percent to 1.63 percent, assuming half to full pass-through. Notably, tariffs on Canada and Mexico ...
Working Paper
Patents to Products: Product Innovation and Firm Dynamics
We study the relationship between patents and actual product innovation in the market, and how this relationship varies with firms’ market share. We use textual analysis to create a new data set that links patents to products of firms in the consumer goods sector. We find that patent filings are positively associated with subsequent product innovation by firms, but at least half of product innovation and growth comes from firms that never patent. We also find that market leaders use patents differently from followers. Market leaders have lower product innovation rates, though they rely on ...
Working Paper
Entrepreneurship through Employee Mobility, Innovation, and Growth
Firm-level productivity differences are big and largely ascribed to ex-ante heterogeneity in the entrepreneurs’ growth potential at birth. Where do these ex-ante differences come from, and what can the policy do to encourage the entry of high-growth entrepreneurs? I study empirically and by means of a quantitative growth model the spinout firms: the firms founded by former employees of the incumbent firms. By focusing on innovating spinouts identified through the inventor mobility in the patent data, I document that spinout entrants significantly outperform regular entrants throughout their ...
Working Paper
Foundational Processes and Growth
This paper studies the interaction between process and product innovations and their distinct role in firm growth dynamics. We differentiate empirically and theoretically two types of process innovations: foundational processes that advance production technology and cost-reducing processes that enhance existing production efficiency. We develop an innovation model of product varieties with quality heterogeneity to illustrate how these innovations affect firm growth differently and highlight how process innovation induces product innovation. By analyzing millions of patent texts from 1900 to ...
Working Paper
The Price of Delay: Supply Chain Disruptions and Pricing Dynamics
We study the role of supply chain disruptions in shaping consumer prices, focusing on both firms' own import shocks and strategic responses to competitors' disruptions. Using a newly constructed microlevel dataset that links transaction-level US import data from bills of lading with high-frequency consumer prices and sales from a consumer panel, we develop a novel approach to estimate the price effects of cost shocks and product availability. Motivated by a model of delivery delays, cost shocks, and firm pricing, we implement a shift-share identification strategy based on delivery shortfalls, ...
Working Paper
Barriers to Creative Destruction: Large Firms and Nonproductive Strategies
This working paper reviews recent empirical evidence on large firms and nonproductivestrategies that hinder creative destruction and reallocation. The focus is on three types ofnonproductive strategies: political connections, nonproductive patenting, and anticompetitiveacquisitions. Across different contexts using granular micro data sets, we overwhelmingly see that asfirms gain market share, they increasingly rely on nonproductive strategies but reduce theirproductive, innovation-based strategies. I also discuss theoretical channels, aggregate implications,and potentials for some policies.
Working Paper
Artificial Intelligence, Productivity, and the Workforce: Evidence from Corporate Executives
We use novel data from a survey of nearly 750 corporate executives to study the effects of artificial intelligence (AI) on productivity and the workforce. We document substantial heterogeneity in AI adoption across firms, with more than half having already invested, though many smaller firms are only beginning to do so. Labor productivity gains are positive, vary across sectors, and are expected to strengthen in 2026, with the largest effects concentrated in high-skill services and finance. These gains are not primarily driven by firms' capital deepening but instead reflect increases in ...
Working Paper
Connecting to Power: Political Connections, Innovation, and Firm Dynamics
How do political connections affect firm dynamics, innovation, and creative destruction? To answer this question, we build a firm dynamics model, where we allow firms to invest in innovation and/or political connection to advance their productivity and to overcome certain market frictions. Our model generates a number of theoretical testable predictions and highlights a new interaction between static gains and dynamic losses from rent-seeking in aggregate productivity. We test the predictions of our model using a brand-new dataset on Italian firms and their workers. Our dataset spans the ...